Get in, get out or press on with gusto!
Have you ever heard of the “endowment effect”?
It is sometimes known by the cute name of “divestiture aversion” by behavioural economists.
Basically, it is the cognitive bias that pretty much everyone has whereby we ascribe more value to things merely because we own them.
For example, you are likely to attribute more value to a domain name or website you own than is perhaps really justified.
The reason why I mention this is that sometimes we need to reassess our situation and work out if what we’re currently doing is really the right thing.
Given that in our recent survey we saw that more than 90% of people who took the survey currently earn less than $1000 a month online, it might be time to reassess your current market and approach to your online business.
Hopefully you’re already in a great market and this serves to validate or reinvigorate your passion and energy.
Maybe it shows that you’re in a market that basically sucks and you should get out.
Or perhaps you have an idea and you need the data to give you the confidence to make the jump!
Let’s agree – right now together to do one of the following with your online business.
- Get in: Got an idea for something? You need to assess if it’s worth pursuing.
- Get out: Already in something and it’s not working? You need to assess if you need to ditch it and get out?
- Press on with gusto!: Already in something but you haven’t given it your 100% focus because you’re not confident that it has solid potential? Do the research and get confident to press on with 100% energy!
Creating your own inertia
“Inertia – the tendency of a body to stay in motion in a straight line unless acted on by an outside force powerful enough to overcome it.”
When I asked in the survey, what was holding you back from success, the overwhelming majority said that you:
1) Don’t have enough focus.
2) Don’t have enough time.
What became clear was that the reason you don’t have enough focus and time was that you were either confused, or prone to jumping around from one shiny object to the next.
You reach what Seth Godin calls “The Dip” when it stops being new and fun and you hit a few temporary set-backs and you give up and move onto the next “easy money” that someone is trying to sell you.
So how do you avoid this?
You need to be confident enough in your idea and your market so that you’ll keep pressing ahead even when there are outside forces trying to make you change course.
You create your own inertia.
Remember that question I often ask.
“How do you set something on fire with a magnifying glass?”
- Step 1: Select something that has the potential to be set on fire. (Clarity).
- Step 2: Focus the light on one point so that it is capable of being set on fire (Focus).
- Step 3: Remain determined to keep the focus on one spot for long enough for the fire to start (Mindset).
This is a useful metaphor for building a successful online business.
The very first thing we need to do is make sure that we have something that has the potential to set alight (and make money).
Does this market have the potential to be set alight?
Some people talk about following your passion in your business. I like this idea, but there is an important balance to it.
If you want to have success in creating revenue online, you need to treat this like a real business.
Forget about thinking of it as your hobby.
OK. . . so now we’re looking at this like a business, then you need to be able to answer the question “so what business are you in?”
The answer shouldn’t be something like “Affiliate Marketing”.
This is NOT your business. It’s the way (or one of many ways) that your business makes money. It’s not the definition of your business.
Pretty much any business should always be framed around how what you do solves someone’s needs.
In other words, what value are you creating for the world.
Even if your only revenue stream is affiliate marketing, you should still be thinking about this idea of value exchange.
Let’s say you love candles and you want to create a business doing something to do with candles.
This is an excellent start. Having a natural interest in a subject is fundamentally important, because it makes you more tolerant of distractions and more likely to push through even when the site doesn’t reward you financially.
However, unless you want to do this as a not-for-profit, you also need to be working within a subject area that has commercial potential.
So you need to find a nice balance between something that you’re naturally drawn to and something that has commercial potential. This includes not being super competitive.
How to assess your market
If you want the easiest path to business success, as is often said, you want to “feed a hungry crowd”.
So here’s what we’re looking for in a market.
- There is a crowd (so there is enough demand).
- They are hungry (so the market isn’t being well looked after and there isn’t too much competition).
- They want to be fed (the market is commercial and will pay money).
So let’s step through the process to identify if we can in fact feed a hungry crowd with your business.
Once you’ve got a few ideas for potential markets, we’re going to step through the process of assessing their potential.
Don’t worry about HOW you’re going to make money in the market just yet. Pretty much any market can work with a huge variety of business models provided there is a hungry crowd.
We just want to see where the opportunities are and how big their potential is.
A practical example – candle market
NOTE: I’m using the excellent SiteSell tool set that many of you have with your SBI! or BizXpress subscription.
A few years back I spent 3 months reviewing every keyword research tool around and wrote a big report on it.
The SiteSell Brainstorm It! tool is the most powerful tool I’ve found for this kind of market assessment.
Try SBI! for WP and follow along.
OK, so let's say I really like candles and I'm interested in seeing if there is any potential in the market that I might want to throw myself into.
I'm now armed with my SBI! for WP toolset so I can log into the brainstorming tool called “Brainstormer”.
Then I want to select:
1) Vertical Brainstorm
2) Site Concept Finder
Then I’ve entered 3 seed keywords.
- Candle making
- Candle supplies
I thought they might cover the main parts of the market – consumer, retail and wholesale.
Then I hit the Brainstorm It! button.
This will go out and spend the next few minutes pulling from a variety of different API’s to come back with some custom analysis.
So once I did that, I was taken to this screen. Don’t freak out. I know it looks pretty overwhelming. There is a ton of cool stuff you can do in here, but I’ll show you how to navigate that.
So the next step is optional, but recommended.
This will help us understand if the market is commercial. In other words, are people spending enough money in the market so that it's worth it for advertisers to pay money to reach them. While at the same time, the competition isn't so heavy going that you can't make money because everything is so expensive.
So we’ll export all the keywords out by selecting 1000 rows per page.
Then Check all
Then “Export All (kw only)”
This will then save that as a CSV file.
We’ll then open this CSV file up in notepad (or similar text editor) and then select all of them and “copy” them to the clipboard.
We then need to go to the keyword planner from Google. This is the free keyword research tool that Google offers. You now need to have a Google AdWords account to get the data we want. If you don't have one already, you can set one up for free.
Note: Your account must be set-up in USD so that the Brainstormer will accept the file import.
Once you've logged in, click on Tools > Keyword Planner.
- Click on Get traffic estimates for a list of keywords.
- Paste the keywords into the large box.
- Click on the Get estimates button.
- In the Enter a bid box, enter 100. Leave the Daily budget box empty. Click on Get detailed estimates.
- A graph and columns will appear.
- Click on the Download button…
Then follow the options in the screenshot below to get it to export correctly.
Now you have this file, upload it into the Brainstormer. Select “Get Google $”
Then take your file and upload it.
So this might seem like a bit of work, but I promise you the info that it gives you is really important. I don’t know of any other tool that allows you to combine this information and provide useful filtering like this.
The magical filters
OK… so now the hard work is done and the super fun part begins.
So we've now loaded 872 keywords with data included.
Now we want to answer two questions.
1) Is this generally a good market for me to go into?
So is there a hungry crowd for us to feed. Is there a nice balance of search volume that is commercial in nature, but not too much competition?
2) Can I narrow in on a part of this market to capture and turn into revenue?
So can I find some part of it that could be serviced a lot better than it is.
The Brainstormer tool has a pretty crazy amount of options hidden behind drop downs that you can explore.
In fact, I personally think they could do a better job on the user interface to make this experience a bit easier.
However, the one thing that they really nail are the filters.
What we want the filter to do is to go through the keywords and look at the attributes of those keywords and sift out the gold.
The Brainstormer does this a few different ways. However, I'll show you how I use it. You might be able to attack it a different way.
I'll show you exactly how I looked at this “candle” market.
So I can now go to the task bar and with one magical click, select “Solid Potential”.
Now you'll notice something above. Our keywords reduced down from 872 to 315. This is really excellent.
So this filter narrowed down all the keywords that have moderate competition and high demand. These are your big opportunities in the market.
The tool identified 315 of these which is about 36% of the keywords which is great.
I would aim to have at least 20% of your keywords remaining after you run this filter.
If it is any less, I would suggest that either there isn't enough demand, or there is just too much competition.
So you can see how powerful that is and provides your first starting point to determine if the market is good.
The next step is a bit of secret sauce that you can add to the mix to really bring the great, profitable keywords to the top and help you identify most importantly what part of the market you want to attack.
The secret sauce
Ok, so this isn't in any of the documentation of SBI! for WP, but here's a nice way of attacking things.
First, let's make sure we see all the right columns. Select “Columns” and then follow the column selection below.
Then on the Ad Value Task Bar select “Winnability”.
That leaves 98 keywords. Now sort by “Profitability”.
Now something interesting emerges. Have a look at these top keywords sorted by profitability.
Almost all of these keywords are for a particular part of the market. It's not people who are buying candles.
It's people who are making candles.
A few ideas…
So we've managed to identify a solid market here that has a ton of opportunities.
I'll be showing you how to grow your business over the coming months, however, I thought I'd share a few ideas on how you could attack this refined market of people who are making candles.
Of course you could start a candle supply wholesaling business which would be good. However, I know most of you would prefer not to sell hard goods and have a big investment up front for stock.
So here are some other ideas.
1) Create a blog targeting people who are making and also trying to sell candles.
This could cover product topics like:
- Fragrance reviews – I looked and you can buy samples cheaply.
- Wax reviews.
- Best selling fragrances – just contact all the suppliers regularly for their best selling list.
- Tips and tricks on how to make better products.
- Candle supply company guides and reviews.
However, there is also a great opportunity for business related stuff like:
- How to create a brand people love.
- Packaging and design.
- Creating value.
- Advice on selling channels.
- Selling candles online.
- How to price your candles
This stuff you could monetize in the normal fashion with affiliate links and Adsense.
However, you could quite easily create your own digital products and sell those.
For example, you could create a subscription service that charges people a regular monthly fee for contant updates on wholesaler lists, where to buy wax cheaply, best selling fragrances, market analysis, bulk buy direct deals with wholesalers as well as a monthly member only advice etc.
Let's say you charged $39 a QTR and you released this information quarterly, but it was a decent bundle so that people really loved it and it was cheap enough that you would never unsubscribe.
Do you think that after a while you could sign up 2 people a day (60 people a month) and you provided enough benefit to people that on average they would stick around for 18 months?
If this is the case after 3 years of solid work, each quarter you would have payments of $43,200 or $172,800 a year.
Do you see how this could work for you?
Persistent, hard work over a sustained period of time, but only actually making 2 sales a day can have magical results?
There is magic in these numbers and I'll show you more over the coming months.
So what are you going to do?
Are you going to “Get in, get out, or press on with gusto!”?
I want to hear that you're making this decision as soon as possible.